Administration Seeking to Raise Minimum Wage, With Exemptions

AP

Published: March 3, 1989

WASHINGTON, March 2—
Labor Secretary Elizabeth Hanford Dole will outline a Bush Administration proposal on Friday to raise the minimum wage to $4.25 an hour over three years, but with a $3.35 hourly ''training wage'' for some new workers, Administration officials said today.

Mrs. Dole is expected to make the proposal during an appearance before the Senate Labor and Human Resources Committee, setting the stage for a prolonged debate between the Democratic majorities in Congress and the new Republican Administration. The minimum wage, which has stood at $3.35 since 1981.

Senator Edward M. Kennedy, the Massachusetts Democrat who is the chairman of the committee, has introduced legislation to raise the minimum to $4.55 an hour over three years, with automatic periodic increases in the future.

But he and other Democrats oppose the sub-minimum wage, which the Administration calls a training wage. Legislation to raise the wage floor died last year in Congress, partly because of a dispute over the training wage. Small Business Exemption

One Administration official, speaking on condition of anonymity, said Mrs. Dole would outline a proposal under which all small businesses would be exempted from the higher minimum wage and continue at the current $3.35 rate.

The training wage envisioned by the Administration is intended to allow businesses to pay newly hired employees $3.35 an hour for the first six months of employment before having to raise their pay to the full minimum.

''She will make the case that this is a proposal that fulfills President Bush's campaign pledge to raise the minimum wage but recognizes that any increase means a loss in job opportunities,'' said the official, who said the details of the Administration position were completed late this afternoon.

''That's why the increase is more modest'' than that proposed last year by Senator Kennedy, said the official. ''And that's why the training wage is there as well, to try to offset any unemployment.''

At a news conference a week after taking office, Mr. Bush said, ''I've always said that my position on a minimum wage is that I would want it linked to a training wage, to a differential of sorts so that you don't throw people out of work by raising the minimum wage.''

A minimum wage increase to $4.25 by 1991 would represent a 27 percent increase in the present minimum hourly wage.

Currently, some small businesses in the retail and service industries are exempted from the $3.35 floor. The exemption would be expanded under the Administration's plan to all small businesses whose annual earnings remain under a specified level.

Organized labor supports an increase in the minimum wage but opposes the training wage, in part because of fears that some employers would cut their costs by hiring people at the training wage and laying off workers with higher pay.

Mrs. Dole said in her confirmation hearing that she would support adding language to any legislation to prevent that from occurring.